February 17 2011

Net Neutrality Regulations Create (Un)Certainty

This week, the Rayburn House Office Building saw two hearings on the contagious net neutrality regulations put out by the FCC in a midnight ruling last December. Interestingly, parties on both sides touted how their position was the one that would spur investment and economic growth.

How can two fundamentally opposing positions reach the same result? And if they did, why would we even be having this debate?

FCC Chairman Genachowski argued at yesterday's hearing in the House Energy and Commerce Committee that this ruling provided some much needed certainty for business innovation. Finally they know where the FCC stands.

Well, yeah, if you are going to threaten net neutrality regulations for several years, you create a lot of uncertainty. When you finally issue your rules, you create a bit more certainty among the huge uncertainty you created in the first place, giving providers some rules to work around. However, the ambiguous wording, e.g. "unreasonable discrimination," leaves much uncertainty for businesses to mull over and therefore deters innovation. Also, what's next on your ambitious regulatory agenda?

How about this for certainty? The FCC has no authority to regulate broadband network management. Internet network providers:  please innovate and experiment with new services and pricing models to increase broadband capacity and reach, making our Internet experience more efficient and effective.

If Internet providers block their competitors, we have existing antitrust rules to protect consumers against anticompetitive activities.

If providers try to charge consumers or application providers excessive rates to access or deliver content at preferred speeds, competition takes care of the problem. There are over 1500 internet providers in the United States, and the vast majority of Americans can choose between at least 4 to 6 providers in their local area.

Net neutrality regulations have created much uncertainty for Internet broadband providers. If allowed to move forward the rules will stifle investment and innovation, raise costs for consumers and businesses, and increase the potential for government censorship of the Internet. 

A resolution of disapproval under the Congressional Review Act (CRA) to repeal net neutrality regulations, introduced by Senator Kay Bailey Hutchison (R-Texas), Senate Republican Leader Mitch McConnell (R-Ky.) and Senator John Ensign (R-Nev.), and a companion measure introduced in the House by Energy and Commerce Chairman Fred Upton (R-Mich.) and Representative Greg Walden (R-Ore.) are a good start. Should these measures fail in Congress, the courts will hopefully overturn the rules. 

Comments
blog comments powered by Disqus